It's great to be here at the Regent host to some of
New York's most important moments during the last year.

This is where we held the reception for the members
of Congress after their historic joint session commemorating 9/11.

It's where President Bush gave a significant speech
on corporate responsibility.

And today, it's where I want to outline a vision for
a New Beginning for Lower Manhattan.

Next week, the Lower Manhattan Development Corporation
will make public seven proposals for the future of the World Trade Center
site the product of months of work by some of the best design teams
in the world.

What you will see, will be very different from the six
site plans that were presented last summer. Some of these new designs
make eloquent statements about what happened on 9/11; they truly are
capable of instructing and inspiring future generations. Some speak
of hope -- and renewal -- more powerfully than any words can. Some
boldly restore the skyline - in ways that say, in no uncertain terms,
this is New York -- and the terrorists didn't win.

Some do all three.

For this, we must thank the LMDC -- led by John Whitehead
and Lou Tomson -- who have worked so closely with Governor Pataki and
me with the Port Authority and with the many individuals and groups
who have a rightful stake in what gets built at the World Trade Center
site.

But no matter how magnificent the best design for the
16 acres of the World Trade Center site proves to be, it must be complemented
by an equally bold vision for all of Lower Manhattan - a New Beginning
for Lower Manhattan - that meets the needs of all of New York City and
of the entire region.

We cannot afford to assume, that what goes on the 16
acres will itself guarantee a bright future for Lower Manhattan.

We've done that before.

When the World Trade Center was first built, it was
hailed as a cure-all for everything that plagued Downtown. True, it
came, over time, to embody the spirit of Lower Manhattan. It was commercially
bustling -- and an international icon. That's why the terrorists destroyed
it.

But, if we are honest with ourselves, we will recognize
that the impact on our City was not all positive. The Twin Towers'
voracious appetite for tenants --weakened the entire Downtown market.
The underground mall, while popular, detracted from the vitality of
the streets that surrounded it by siphoning pedestrians away from above-ground
stores.

The World Trade Center did not - as its objective was
- increase employment below Canal Street. In the 1970s, 22% of all
Manhattan jobs were Downtown. By 2000, that had declined to just over
19%. The number of jobs Downtown, during that period, actually declined
by 64,000. And similarly -- with tourism -- before 9/11, only 25% of
all tourists to New York came Downtown. Today, in the city that never
sleeps, much of Lower Manhattan goes to bed promptly at 6 o'clock.

Of course, it wasn't just the World Trade Center that
contributed to this decline. We have underinvested in Lower Manhattan
for decades. It's been seventy years since we built a new transit line
Downtown. There is far less open space here than in other places around
the City. There aren't enough schools either.

The time has come -- to put an end to that, to restore
Lower Manhattan to its rightful place as a global center of innovation
-- and make it a Downtown for the 21st Century.

To do so, we have much to build on.

First, there's tradition.

Lower Manhattan has always been where ideas were first
tried opinions first expressed news first spread. Our first president
was inaugurated here. Our harbor was the port for the first steam-powered
ferry. When Thomas Edison first turned on streetlights, he did it in
Lower Manhattan. New York's first subway began directly under City
Hall. The original Great White Way was Downtown. At a long-gone buttonwood
tree on Wall Street, the first American stock was traded.

From the very beginning, Lower Manhattan was open to
anyone who had a dream - and was willing to work. Just 22 years after
it was first settled, 18 languages were already spoken here. This mixture
of peoples and ideas -- fueled by dreams -- fed the competitive fires
that made Lower Manhattan give birth to the greatest city in the world.

It was no accident that the Statue of Liberty was placed
off the Battery. And it was no accident that Lower Manhattan has witnessed
the construction of the world's tallest building -- nine times -- culminating
in the World Trade Center itself.

Moving forward, Lower Manhattan must become an even
more vibrant global hub of culture and commerce, a live-and-work-and-visit
community for the world. It is our future. It is the world's second
home.

On its streets, conversation in every conceivable language
should hum: parents talking with their kids on the way to school along
Greenwich Street in the morning Businessmen negotiating on Exchange
Place in the afternoon Novelists and artists arguing at cafes, looking
out across the East River at night.

To make it that place, people who reflect all the diversity
and drive of New York, have to live, work, and visit Downtown. The
public sector's role -- is to catalyze this transformation -- by making
bold investments -- with the same sense of purpose and urgency that
allowed us to clean up the World Trade Center site months ahead of schedule,
and hundreds of millions of dollars under budget. And to be effective,
those investments must in turn trigger a response by the private market,
that will - through joint public/private initiatives -- create the kind
of Lower Manhattan we want.

There are three types of investments the public sector
must make now:

Those that (1) connect Lower Manhattan to the world
around it; (2) those that build new neighborhoods; and (3) those that
create public places appealing to the world.

Let's start with Connecting Lower Manhattan

Lower Manhattan's competition to be a global center
isn't just Midtown -- or even Chicago or Los Angeles. Increasingly,
it is London, and Berlin, and Hong Kong. In this worldwide competition,
easy access is becoming more and more important. We must invest in
making downtown more accessible -- both to the rest of the world, and
to residents of the metropolitan region.

New York is one of the few premier international cities
without a direct mass transit link between its airports and the city
center. In London, the time from the city center to the airport is
as little as 30 minutes. In Hong Kong, it is 23 minutes. In Berlin,
it will soon be 17 minutes. In New York City it is often one hour or
more - and don't even ask if it is a Friday night or raining!

To make Lower Manhattan a global center, we must have
direct, one-seat airport access. Imagine stepping onto an AirTrain or
PATH car, and thirty minutes later walking to your gate at JFK or Newark.

How? By extending the AirTrain system -- from JFK through
a new tunnel to Lower Manhattan -- and by extending the PATH train --
from Newark's Penn Station to Newark Liberty Airport. This can be
done -- and it must be done.

A big concurrent benefit is for commuters to Lower Manhattan.
These same airport connections work both ways - both for travelers and
for locals. A new tunnel between downtown and JFK, will connect Downtown
to any Long Island Railroad train at Jamaica.

The need is obvious. In 1932 -- the last time mass
transit was added to Lower Manhattan -- 63% of residents of the region
lived in New York City. Today, that figure is down to 37%. We need
to get our workforce from where they now live, to where they still work.

Similarly, via water -- over the last year, we have
invested heavily in ferry stations to bring more people to Lower Manhattan
-- from more places -- more conveniently. We need to continue to do
so, with investments in links to other parts of the five boroughs, regional
service to the suburbs, connections to tourist destinations, and potentially
to LaGuardia airport. For passengers who are coming from Westchester
and Connecticut, we need a new ferry linked to MetroNorth by a new station
on the Harlem River to bring train riders Downtown 5-10 minutes faster
than today, and with a very pleasant ride.

And on the roads: today, over 3,500 buses travel daily
to Lower Manhattan, clogging already congested streets. We can't do
without their capacity - but don't have storage for them mid-day. A
new bus parking facility will help keep the streets free and clear by
giving those buses a place to go between entering and leaving the City.

Lastly, underground: Construction has begun on a new
PATH station at the World Trade Center site, and will begin soon on
a new transit hub at Fulton and Broadway. The new stations will untangle
the knot of fifteen subway lines that converge Downtown, and then connect
to the PATH and AirTrain. Those two stations should also be exhilarating
gateways that lift everyone's eyes and spirits whether it's a visitor
from Buenos Aires seeing Lower Manhattan for the first time ever, or
a commuter from New Jersey seeing it for the first time that day. These
stations can be the first of Lower Manhattan's many additions to the
landmarks of tomorrow.

Second we must Build New Neighborhoods

While the number of people who live below Chambers Street
has grown significantly from 12,000 to 20,000 in the past ten years other
than Battery Park City, for residents there isn't a there there. No
real supermarkets not enough open space and not enough schools. And
for that reason, families make up a much smaller proportion of the Downtown
community than in other communities throughout the city.

With targeted investments, we can catalyze the creation
of two exciting new neighborhoods south of Chambers Street -- one near
Fulton Street, east of Broadway -- and the other, South of Liberty street,
west of Broadway.

Along Fulton Street, the focus for this neighborhood
will be a new public square called Fulton Market Square. If you walk
along Fulton Street today you'll see 99-cent stores and vacant storefronts.
Fulton Market Square, established as a public market, can begin the
transformation of that street, into a great place to shop, see a movie,
look at art, or just people-watch.

Re-establishing Fulton Street through the World Trade
Center site would make it a thoroughfare that stretches from river to
river. With ferry stops on each end -- and two major transit hubs in
the middle -- Fulton would join Broadway as one of the two great arteries
in Lower Manhattan.

As to the area south of Liberty: Let's start with the
spot where today cars dip into the Brooklyn Battery Tunnel. We propose
to build a new park - called Greenwich Square - on a deck over the mouth
of the tunnel. Roughly comparable in size to Gramercy Park, Greenwich
Square will be one of the City's green gems.

And to knit the area south of Liberty to Battery Park
City, we will make West Street today, a loud and desolate six-lane highway into
a promenade lined with 700 trees, a Champs-Elysees or
Commonwealth Avenue for Lower Manhattan -- as welcoming to walkers as
to drivers.

Residents of Battery Park City will finally be able
to walk directly east, along an extended Exchange Place, to reach the
Financial District and the East River.

To further encourage families to move Downtown, we must
build a public library branch and enough schools to accommodate new
students, while alleviating crowding in existing Downtown classrooms.
And wouldn't it be great if these schools were part of the World Trade
Center site? I think nothing is more appropriate to remember those
we lost than to build something for their childrens' future.

We also have to connect these new Downtown neighborhoods
to the existing communities of Chinatown and the Lower East Side. To
develop innovative ways to do that, we've already formed an inter-agency
task force that includes City Planning, the NYPD, and the Department
of Transportation. The LMDC also has issued a request for proposals
on how we can better link these neighborhoods to the rest of Downtown.

Thirdly we need to Create New Public Places

New York is New York because it has majestic places
open to the public -- that convey the unique thrill of being here.
Let me take you on a land-bound Circle Line tour of a re-imagined Lower
Manhattan.

Starting at the prow of Lower Manhattan the Battery we
will build on the successes of the Battery Conservancy, by dramatically
reshaping Battery Park to turn what is today just a place to pass through
-- into a destination in itself -- a Sheep's Meadow for Lower Manhattan.

We'll also extend the plaza in front of a renovated
Battery Maritime Building one of the City's most beautiful and, unfortunately,
most dilapidated structures.

Water Street, today a canyon between office towers,
will become a beautiful tree-lined boulevard. On the area's historic
side streets, pedestrians will glimpse something new and marvelous along
the East River. It could be, as envisioned by Community Board 1 and
the Downtown Alliance, a relaxed place to stroll, with open tables shaded
by umbrellas on a sunny day

Or, if we are bolder -- and if we can find environmentally
friendly ways to build in the water -- the City could expand out onto
the river, creating something new on every one of these harborside city
blocks. New cultural institutions, surrounded by playgrounds, ballfields,
open grass, and apartments could look out across the harbor

Others have suggested that we stretch our imaginations
further, and create a wonderland of open space, with a sea-level ice-skating
rink, a garden without soil maybe even a forest of trees.

Whatever we choose, our new waterfront will look out
onto ferries crisscrossing among Battery Park, Governors Island, the
new Brooklyn Bridge Park, the Statue of Liberty, Ellis Island, even
Liberty State Park in New Jersey, knitting these green spaces into a
collection of open spaces that are, in total, larger than Central Park.

At the northern end of the new park along the East River,
Fulton Street will stretch back to the World Trade Center site, the
nucleus of the new Lower Manhattan. Anchoring the commercial and residential
neighborhoods, and the restored streets would be a memorial that would
put a physical shape to our grief and to our hopes for the future, and
give us somewhere we can come together to share our thoughts and reflections
on how September 11th affected our lives.

We can link all these places with a pathway that loops
down West Street... across the Battery up Water Street and back across
Fulton to the World Trade Center site.

Traveling around the loop could be shuttle buses, offering
an easy-to-use, step-on step-off service -- free of charge. And we
can examine innovative ways to manage streets and traffic Downtown,
reinforcing the feeling that this is one place. Getting around easily
means community - and that's what we're trying to create.

Around that loop only 2.2 miles long we'll add to the
20 cultural institutions that already exist Downtown today, creating
a critical mass to draw tourists from around the world.

Cultural institutions can animate a neighborhood and
define a community. Together, if we could build large-scale performing
arts centers people would be on the streets 24/7. Museums - some helping
to interpret the World Trade Center memorial and some devoted to already-defined
missions - would give further impetus to visit New York's heartland.
And smaller arts centers, would provide much-needed studio and rehearsal
space for performing and visual artists, and offer a focus for the dynamism
and creativity that define the best this city has to offer.

How do we make this happen?

Done correctly, these public investments will spark
a chain of private market reactions.

Over the next ten years if we make the investments we've
described the number of new jobs Downtown will be twice what it would
have been, justifying the need for ten million square feet of new commercial
space throughout all of Lower Manhattan. New companies, in a range
of industries, will grow Downtown -- strengthening the existing financial
nerve center -- while diversifying it.

And, as the number of successful companies Downtown
increases, Lower Manhattan will become more and more attractive to any
company that prides itself on drive and creativity needs access to
a diverse international workforce and wants its employees in an area
that's not only physically attractive, but exciting.

Many companies have already recognized this and made
long-term commitments to Downtown. In fact, I am happy to announce
today that Goldman Sachs is reversing its previous plan to move its
equity division out of the City, and will, instead, maintain the majority
of that division right here in Lower Manhattan. This is just an example
of many commitments to come.

New office space will flourish along a commercial area
linked by the spine of Broadway. When we finish the new transit hub
at Fulton and Broadway, new office buildings and maybe even a new hotel
will spring up to the east and to the south, completing the Canyon of
Heroes.

As to financing, use of insurance proceeds will help
to lower rents, and the new commercial construction can be completed
with tax-free Liberty Bonds.

We have already proposed to the federal government a
tax plan designed to lure foreign companies to relocate their headquarters
to Lower Manhattan. Under the proposal, which we call the World Trade
Center Tax Incentive Zone, qualified companies that move their headquarters
to the Liberty Zone, would be taxed as if they hadn't relocated at all,
fully protected from the increased federal taxes associated with moving
to the United States.

As for housing, with the public investments we are proposing,
we believe private developers, some of whom will also use Liberty Bonds,
will create at least 10,000 new apartments over the next ten years -
over and above the 65,000 new units I announced on Tuesday.

To encourage additional housing, we propose relaxing
existing density restrictions on residential development in Lower Manhattan.
And we'll provide developers with a subsidy to make 20% of the new units
Downtown affordable to people who couldn't otherwise live in market-rate
housing.

We have catalogued the costs of every one of these improvements down
to the last tree, where possible and calculated when we would be able
to make each of these investments.

We've estimated the total cost, in today's dollars,
to be $10.6 billion.

Most of those funds -- $8.8 billion -- will go to the
infrastructure we've described. The connection to John F. Kennedy airport
is the costliest project, the one that takes the longest, and perhaps
the one most needed for Lower Manhattan's future. This would take 9
years at a cost of just under $4 billion. Of course before we start,
we must continue to examine all alternatives, including the Super Shuttle,
before selecting the project that delivers the most, for the lowest
price. But either way, one seat to the plane is key to our success.

Of the funds we've received from the federal government,
we can use $5.9 billion for this plan. The Port Authority can help
too, with passenger facility charges, contributions from its insurance
proceeds and from some of the funds it was before September 11th intending
to spend on the World Trade Center.

We can also use proceeds from the sale of real estate
development rights over the transit hub, from Greenwich Square, the
East River park, and Fulton Market Square, and taxes from construction
at the World Trade Center site itself.

Finally, depending upon what happens with the land swap
proposal and with the insurance dispute over one occurrence or two,
we could use some of the excess insurance proceeds from the leaseholders
at the World Trade Center.

In summary, we might not need any additional funds.
But if we do, there's always the potential of federal or state monies
- monies we won't need until 2009 at the earliest.

Now this kind of far-reaching, city-changing investment
of time and money isn't going to be popular with everyone. Some people
will inevitably pick on a piece of our vision they don't like, and say
we shouldn't do any of it. Others will point to the maze of rules and
regulations, policies and practices, procedures and protocols, and wonder
whether we can get this done. And finally, some will just feel scared,
which is natural, and they might ask how we can afford to do this at
this point in the city's history.

In fact, listen to these naysayers:

The very idea is ridiculous.

The scheme is humbug and the sooner it is abandoned
the better.

Those words appeared in the 1850s, and the idea they
were talking about, the scheme they derided, was the creation of Central
Park. By the time the Park was completed, twenty thousand New Yorkers
had carted ten million cartloads of soil by hand to create an oasis
the world has never seen, before or since.

If you study New York history, you realize that it is
often at the moments when New York has faced its greatest challenges
that we've had our biggest achievements. Central Park was created on
the heels of a financial panic. The subways were built, at the turn
of the century, as overcrowding Downtown reached life-threatening proportions.
During the Great Depression, New York set the national standard by putting
its people to work building parks and highways. The Empire State Building,
too, was constructed in just thirteen months during the Depression's
deepest moments.

Again today, New York must transform this City, to prepare
it for the future. We must reinvent Lower Manhattan. We must open
the waterfront to the public -- not just in Lower Manhattan, but in
Downtown Brooklyn, and throughout the City, wherever possible. We must
provide housing for those who want to live in New York, not just in
Lower Manhattan, but in all five boroughs. And we must ensure New York
continues to lead in the global economy -- not just by reinventing Lower
Manhattan, but by creating new business districts throughout the entire
City -- including the Far West Side of Manhattan, which can, with an
expansion of the Javits Center, drive the tourism industry so crucial
to the future of our economy.

There might be those who doubt whether we can set aside
our differences, and there might be those who doubt whether we have
the stamina required to get this done. But if history teaches us anything,
it's that you should never doubt New York. Never. We can do this because
we have to.